topic Re: Pimco article on SA in Closed-End Fundshttps://community.morningstar.com/t5/Closed-End-Funds/Pimco-article-on-SA/m-p/687702#M3152
<BLOCKQUOTE><HR /><LI-USER uid="3859"></LI-USER>&nbsp;wrote:<BR /><P>Alpha Gen Capital has a new article out this morning with his observations of Pimco cefs.&nbsp; It's a good read.</P><P><A href="https://seekingalpha.com/article/4333818-pimco-cef-update-2008-redux?utm_medium=email&amp;utm_source=seeking_alpha&amp;mail_subject=pci-pimco-cef-update-it-s-2008-redux&amp;utm_campaign=rta-stock-a" target="_blank" rel="noopener">https://seekingalpha.com/article/4333818-pimco-cef-update-2008-redux?utm_medium=email&amp;utm_source=seeking_alpha&amp;mail_subject=pci-pimco-cef-update-it-s-2008-redux&amp;utm_campaign=rta-stock-a</A></P><HR /></BLOCKQUOTE><P>As with anything this complicated, I would urge caution taking ANYTHING at face value.&nbsp; Specifically, I saw the opinion that distributions shouldn't be cut, but I don't see any explanation as to why the PCI NAV dropped 32% over the last month!&nbsp; In fact, the article says that it's unlikely that the funds will have to de-lever!&nbsp; I believe the drop in fund NAVs represents the net effect of deleveraging that has already occurred this month.</P><P>If so, the NAV should settle into the $15 range and stay there, until the fund can leverage up again.&nbsp; If so, Pimco should be able to 'project' the remaining 9 months distributions, and adjust accordingly.&nbsp; That would come out next month.</P><P>At any rate, we'll, obviously, see.&nbsp; I, for one, sold out my PCI last week.&nbsp; I won't consider going back in until I see the NAV turn around and start going up.</P><P>&nbsp;</P>Wed, 25 Mar 2020 22:05:26 GMTElLobo2020-03-25T22:05:26ZPimco article on SAhttps://community.morningstar.com/t5/Closed-End-Funds/Pimco-article-on-SA/m-p/687661#M3147
<P>Alpha Gen Capital has a new article out this morning with his observations of Pimco cefs.&nbsp; It's a good read.</P><P><A href="https://seekingalpha.com/article/4333818-pimco-cef-update-2008-redux?utm_medium=email&amp;utm_source=seeking_alpha&amp;mail_subject=pci-pimco-cef-update-it-s-2008-redux&amp;utm_campaign=rta-stock-a" target="_blank">https://seekingalpha.com/article/4333818-pimco-cef-update-2008-redux?utm_medium=email&amp;utm_source=seeking_alpha&amp;mail_subject=pci-pimco-cef-update-it-s-2008-redux&amp;utm_campaign=rta-stock-a</A></P>Wed, 25 Mar 2020 19:37:27 GMThttps://community.morningstar.com/t5/Closed-End-Funds/Pimco-article-on-SA/m-p/687661#M3147marymary2020-03-25T19:37:27ZRe: Pimco article on SAhttps://community.morningstar.com/t5/Closed-End-Funds/Pimco-article-on-SA/m-p/687663#M3148
<P>Thanks, Mary.</P>Wed, 25 Mar 2020 19:49:57 GMThttps://community.morningstar.com/t5/Closed-End-Funds/Pimco-article-on-SA/m-p/687663#M3148outandabout2020-03-25T19:49:57ZRe: Pimco article on SAhttps://community.morningstar.com/t5/Closed-End-Funds/Pimco-article-on-SA/m-p/687675#M3150
<P>Thanks Mary</P>Wed, 25 Mar 2020 20:21:35 GMThttps://community.morningstar.com/t5/Closed-End-Funds/Pimco-article-on-SA/m-p/687675#M3150AlphaGenCapital2020-03-25T20:21:35ZRe: Pimco article on SAhttps://community.morningstar.com/t5/Closed-End-Funds/Pimco-article-on-SA/m-p/687702#M3152
<BLOCKQUOTE><HR /><LI-USER uid="3859"></LI-USER>&nbsp;wrote:<BR /><P>Alpha Gen Capital has a new article out this morning with his observations of Pimco cefs.&nbsp; It's a good read.</P><P><A href="https://seekingalpha.com/article/4333818-pimco-cef-update-2008-redux?utm_medium=email&amp;utm_source=seeking_alpha&amp;mail_subject=pci-pimco-cef-update-it-s-2008-redux&amp;utm_campaign=rta-stock-a" target="_blank" rel="noopener">https://seekingalpha.com/article/4333818-pimco-cef-update-2008-redux?utm_medium=email&amp;utm_source=seeking_alpha&amp;mail_subject=pci-pimco-cef-update-it-s-2008-redux&amp;utm_campaign=rta-stock-a</A></P><HR /></BLOCKQUOTE><P>As with anything this complicated, I would urge caution taking ANYTHING at face value.&nbsp; Specifically, I saw the opinion that distributions shouldn't be cut, but I don't see any explanation as to why the PCI NAV dropped 32% over the last month!&nbsp; In fact, the article says that it's unlikely that the funds will have to de-lever!&nbsp; I believe the drop in fund NAVs represents the net effect of deleveraging that has already occurred this month.</P><P>If so, the NAV should settle into the $15 range and stay there, until the fund can leverage up again.&nbsp; If so, Pimco should be able to 'project' the remaining 9 months distributions, and adjust accordingly.&nbsp; That would come out next month.</P><P>At any rate, we'll, obviously, see.&nbsp; I, for one, sold out my PCI last week.&nbsp; I won't consider going back in until I see the NAV turn around and start going up.</P><P>&nbsp;</P>Wed, 25 Mar 2020 22:05:26 GMThttps://community.morningstar.com/t5/Closed-End-Funds/Pimco-article-on-SA/m-p/687702#M3152ElLobo2020-03-25T22:05:26ZRe: Pimco article on SAhttps://community.morningstar.com/t5/Closed-End-Funds/Pimco-article-on-SA/m-p/687997#M3182
<P>Not that distributions "shouldn't be cut" but that they are "unlikely" to be cut.&nbsp; I put an explanation of why the NAV is down - look at non-agency MBS.&nbsp; IOFIX was given as an example.&nbsp; Money flowing out of that fund (among others) is driving down the price of non-agencies.&nbsp; &nbsp;This affects all holders of non-agencies despite the fact that they may not be selling.&nbsp; PCI and PDI are half non-agencies and half HY global debt.&nbsp; Both are down big right now.&nbsp; Add in a bit of gearing and you have the reason for the NAV being down so much.&nbsp; &nbsp;</P><P>Delevering would not drop the NAV by 30%.</P>Fri, 27 Mar 2020 00:07:19 GMThttps://community.morningstar.com/t5/Closed-End-Funds/Pimco-article-on-SA/m-p/687997#M3182AlphaGenCapital2020-03-27T00:07:19Z